A senior executive at a private US health firm has been appointed to lead NHS England - the most powerful body in the health service.

Simon Stevens, who has worked as an NHS manager and acted as a health adviser to Labour, will take over from Sir David Nicholson in April.

Mr Stevens is currently working for United Healthcare as its global health president.

His appointment comes at a challenging time for the health service.

While the NHS budget has been protected - it is rising 0.1% each year at the moment - the settlement still represents the biggest squeeze on its funding in its history.

This is happening at a time when there are growing demands for care.

There have already been signs the NHS is struggling to cope.

Last winter pressure on A&E units meant the waiting time target was missed from January to March.

Meanwhile, a growing number of trusts are running up deficits.

Who is Simon Stevens?

Despite having worked in the US for the past three years, the Oxford University graduate has plenty of NHS experience.

During the late 1980s and for much of the 1990s he worked in a number of management positions, including a stint at Guy's and St Thomas's Hospital Trust in London and for a mental health service in Northumberland.

In 1997, he became an adviser to Alan Milburn and co-authored the 2000 NHS Plan, which led to record increases in investment for the health service.

From 2001 to 2004 he worked directly with Tony Blair and was a strong advocate for increasing the use of the private sector.

After that he joined United Healthcare, first to lead their European arm and then as a senior executive in the US.

As chief executive of NHS England, Mr Stevens will have control over the day-to-day running of the health service.

Mr Stevens would be paid the same as Sir David - £211,000 per year - but had offered to take a 10% pay cut in the first year due to "NHS spending pressures", NHS England said.

He will draw a salary of £189,900 in the first year.

'American values'

Christina McAnea, head of health at the union Unison, sounded a note of caution about Mr Stevens' appointment.

She told the Today programme on BBC Radio 4: "I am surprised that they haven't been able to find someone within the NHS... and somewhat concerned that this is the Tory-Lib Dem government trying to install American medical values."

Ms McAnea said she hoped it was not a "surreptitious attempt" to move away from the NHS values of "free medicine for all"

But the chairman of NHS England, Sir Malcolm Grant, said they wanted to do a global search and believe Mr Stevens is the right person to lead the health service through the coming years.

Sir Malcolm told the Today programme: "We wanted the best in the world and we've got I think the best in the world. Of course we've got somebody who's got experience both of the public health system in this country and of the best of American healthcare.

"The NHS has to be open to ideas from across the world. All nations are facing a crisis in the affordability of healthcare and the American experience is valuable to us."

'Challenging'

Mr Stevens said: "It will be a privilege to lead NHS England - at a time when the stakes have never been higher - because I believe in the NHS, and because I believe that a broad new partnership of patients, carers, staff and the public can together chart a successful future for our health service."

NHS England chairman Prof Sir Malcolm Grant said: "I am delighted that Simon will be taking on this exceptionally challenging leadership role for the NHS.

"We have been through a rigorous global search, and engaged with a range of excellent candidates.

"I am confident that Simon Stevens is the right person to lead NHS England through the coming years, bringing new ideas and fresh energy."

Health Secretary Jeremy Hunt said: "Simon has an extraordinary reputation in the UK and abroad as a reformer and an innovator, and we are lucky to have someone of his calibre doing such a vital role.

"He will make a key contribution to the two biggest challenges facing the NHS right now - how to raise standards of care and also be financially sustainable.

"His passion for our universal health service free at the point of use goes back many years but he will add international expertise as we face the challenges ahead."

The announcement comes after Sir David said in May he was stepping down after seven years leading the health service.